How to Buy a Foreclosed Home As a Primary Residence
Government programs allow easy access to financing for qualified foreclosure homes. Foreclosures to fit these programs can be found at Homepath.com. These homes are occasionally in need of repair, but many are decent, safe and accessible to any consumer who meet the selected program's criteria. Homepath.com offers financing to borrowers with less than perfect credit, low cash flow or who may need a renovation loan with purchase.
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Instructions
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Visit Homesteps.com and select the area where you want to purchase a home. You can opt to search by zip code, city/state or available financing options. Enter the city/state, ZIP code or desired financing options and click "search."
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Review the list of properties available in the desired area and select the home you are interested in purchasing.
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Call the broker's number as provided in the listing information. The broker can provide further details about the property outside of what is listed in the property description. Inquire about how to make an offer on the property. The broker will advise you what specific documents and how much earnest money you will need to submit an offer to purchase contract.
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Apply for a prequalification of a mortgage with Fannie Mae by clicking "Home Path Financing" on the Home Path home page. Click "Find a Home Path Mortgage Lender" then select your state.
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Select a mortgage company to view their contact information. You can usually request a prequalification letter over the phone after sending the information the mortgage broker requests to determine your prequalification. The prequalification letter will help you determine the maximum amount of money you can borrow to obtain a new house.
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Fax the documents requested by the broker, and the offer to purchase contract to the broker at the number provided.
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When your offer is accepted by the seller, you are required to send an earnest money check to secure the contract. This payment is usually 3 percent of the price.
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Contact the mortgage broker who issued you the prequalification letter to proceed with securing the loan. The mortgage broker will request a longer list of items to begin processing the loan so that your loan can be officially approved. Once the loan is approved, you can schedule a closing date with the predetermined attorney where you will receive the keys to your new home.
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Tips & Warnings
Organize your bank statements, pay stubs, tax returns and other personal financial documents before conducting a home search. This information is readily available to help mortgage brokers and loan underwriters process your paperwork much quicker.
Get your prequalification letter before making an offer on a home. The offer to purchase contract is a legally binding agreement so it is important not to tie yourself to a home you will not be able to afford.
